Would the Western World have been better off without Raeganomics?

GogLais

Ad Honorem
Sep 2013
5,461
Wirral
Let's not forget that history teaches us there has been examples of wealth inequality since the beginning of civilizations. This is nothing new. Europeans peasants and serfs were infinitesimally poorer than nobles and kings. In the late 1880s Andrew Carnegie was worth what would be $4.8B according to this article.
The Gilded Age Family That Gave It All Away: The Carnegies
At the same time, his unskilled laborers in the steel mills earned about $600 year for 12 hour, 7 days a week work, equal to less than $18,000/year, although this article says the earned less during the Great Depression.
Life In The Pittsburgh Steel Mills Was Hell On Earth
Certainly a great income disparity was present then.
I think it’s reasonable to differentiate between the likes of Carnegie and present day people like Bill Gates who basically set up enterprises that became hugely successful and company directors and CEOs, who are effectively employees.
 

Solidaire

Ad Honorem
Aug 2009
5,596
Athens, Greece
But what is "non-extreme redistribution"? What amount of money should be transferred from the people who make money to the people who do not? 20%? 40%? 60%? 91%?
At what point does redistribution cross the line between "extreme" and "non-extreme"?
I suppose economists would disagree about that too. Common sense, at least in my opinion, implies that extreme redistribution would amount to communist-like wealth seizure, or something like that. Anyway, the point of the surveys, both from IMF and OECD, is not to advocate socialist-like equality, but to emphasize that extreme inequality harms the economy, and lessening it would be beneficent to all.
 

Solidaire

Ad Honorem
Aug 2009
5,596
Athens, Greece
I guess my point is, has it really ever gone away? In the 1950s the average worker had more purchasing power in comparison to most CEOs, but this is all relative. There were still the Vanderbilts and Howard Hughes of the world. Nominal redistribution might make some feel good, but the average person isn't going to live like the entertainers and professional sports figures who make nine digit salaries.
It has never gone away, not even in communist countries. But the point is not to make it go away, but to lessen its peaks. This is what those surveys illustrate, and this is my opinion as well. There is a point after which things become problematic, moderation is usually the best course. Of course it wouldn't matter how rich others might be, as long as the economy and life keeps improving for all, but as argued, that is not the case when things become extreme. Extreme inequality benefits no one, in the end, harming the economy and the prospects of viable growth.
 

Willempie

Ad Honorem
Jul 2015
5,391
Netherlands
This. The whole idea of Reaganomics was to increase the capital and freedom available to the rich, so that they, in turn, would create more jobs. The famous (or should I say infamous) "trickle-down" effect. Which never worked, and probably never will. The rich will create some jobs, but will also hold on to the larger part of the additional capital made available to them. Money is pulled out of the economy, stagnating in banking accounts (and offshore tax-avoidance). To make the most of it, this should find its way to the multitude of spenders in the middle and lower classes, and to the entrepreneurs of the middle class, the traditional backbone of capitalism, who will create new jobs in turn. Less inequality is not just a leftist slogan, it's a prerequisite for a healthy capitalist economy as well. And in times of grave crises, it is always the state that props up the economy and saves the day. Not the "market" or the rich. The latter simply weather the storm, stashing their money safely away. It is the states that are called to create or save jobs, prop up failing banks, etc, etc. During the 30's, and during this last major crisis from 2008 and onward.
Really? From 7.5% unemployment in '81 to 5% in '89 (with a spike of 10+% due to a crisis in '82). That is not creating jobs? And remember this was after the 70s which also wasn't candyland in economic terms.
And this was before the days that unemployment definitions were altered to make the statistics look better.
 

Willempie

Ad Honorem
Jul 2015
5,391
Netherlands
It has never gone away, not even in communist countries. But the point is not to make it go away, but to lessen its peaks. This is what those surveys illustrate, and this is my opinion as well. There is a point after which things become problematic, moderation is usually the best course. Of course it wouldn't matter how rich others might be, as long as the economy and life keeps improving for all, but as argued, that is not the case when things become extreme. Extreme inequality benefits no one, in the end, harming the economy and the prospects of viable growth.
Or does it? Who is more effective at aid? Bill Gates or the government?
 
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Rodger

Ad Honorem
Jun 2014
6,171
US
I think it’s reasonable to differentiate between the likes of Carnegie and present day people like Bill Gates who basically set up enterprises that became hugely successful and company directors and CEOs, who are effectively employees.
I see your point and can agree to some degree. I think of Henry Frick and his role for Carnegie. He was a manager of sorts for Carnegie and carried out the dirty work. His efforts during the Homestead Steel Strike of 1892 is well documented, as well as the subsequent attempted assassination upon his life. While Carnegie was not viewed as the devil by most, Frick was. In that sense he provided an important role for the organization. I once worked at a place where the director always wanted to put on a face of fairness and amiableness. However, the two biggest jerks in management were her henchman and henchwomen. They did the dirty work she didn't or couldn't do.
Henry Clay Frick - Wikipedia
 

Rodger

Ad Honorem
Jun 2014
6,171
US
It has never gone away, not even in communist countries. But the point is not to make it go away, but to lessen its peaks. This is what those surveys illustrate, and this is my opinion as well. There is a point after which things become problematic, moderation is usually the best course. Of course it wouldn't matter how rich others might be, as long as the economy and life keeps improving for all, but as argued, that is not the case when things become extreme. Extreme inequality benefits no one, in the end, harming the economy and the prospects of viable growth.
How is this monitored and corrected? Who determines when too much is too much? the Market? the board? The government? What about unincorporated profits, that is non publicly traded companies? Who provides oversight, if any? The truth is, most excessive wealth is inherited. The first generation makes the wealth and the rest typically live off it.
 

Chlodio

Forum Staff
Aug 2016
4,471
Dispargum
Really? From 7.5% unemployment in '81 to 5% in '89 (with a spike of 10+% due to a crisis in '82). That is not creating jobs? And remember this was after the 70s which also wasn't candyland in economic terms.
And this was before the days that unemployment definitions were altered to make the statistics look better.
No one denies the economy was much better in the '80s than in the '70s. The question is, how much credit does Reagan deserve? How much did Reagan do himself and how much would have happened without him? The economy goes in cycles. It never stays bad for long. After 10 years or so of high inflation and unemployment, it was pretty much guaranteed to get better in the '80s regardless of who was president. No doubt Reagan helped a little, but I think he gets more credit than he deserves.
 

Solidaire

Ad Honorem
Aug 2009
5,596
Athens, Greece
Really? From 7.5% unemployment in '81 to 5% in '89 (with a spike of 10+% due to a crisis in '82). That is not creating jobs? And remember this was after the 70s which also wasn't candyland in economic terms.
And this was before the days that unemployment definitions were altered to make the statistics look better.
A 2.5% difference is marginal, and can be caused by innumerable reasons. If that's the supposedly big achievement of Reaganomics, it's not really much. IF it was due to these policies, even that marginal improvement.
Or does it? Who is more effective at aid? Bill Gates or the government?
The government. But this is not the point, in any case. Read the surveys. The day the IMF supports government over private sector will be the day hell freezes over. And yet, it argues that extreme inequality is harmful. That is the point.
 

Solidaire

Ad Honorem
Aug 2009
5,596
Athens, Greece
How is this monitored and corrected? Who determines when too much is too much? the Market? the board? The government? What about unincorporated profits, that is non publicly traded companies? Who provides oversight, if any? The truth is, most excessive wealth is inherited. The first generation makes the wealth and the rest typically live off it.
Who determines it? Specialists, I guess. Read the surveys. Instead of trying to split hairs, and denying reality, try to accept that even right-wing specialists agree that inequality has gone to excesses. You may choose to ignore even their opinion, but in that case, I have little else to say to you about the matter.